Ramping Up Retention

Health clubs that focus on sales and neglect customer service may bring in waves of new members, but if their clients are sneaking out the back door as quickly as they came in the front door, their low retention rates may be chipping away at their bottom line. Case in point: it costs two-and-a-half times more to recruit a new member as it does to retain an existing member, says Bob Esquerre, president of Esquerre Fitness Group, a consulting company.

“You're wasting money every time you lose a member, and no one is in this business to lose money,” he says. “If you do a great job of taking care of your members, they'll refer their friends and coworkers and become your club's business card, article in the newspaper or advertisement on the radio, and it won't cost the club a penny.”

Fitness facility employees need to work together as a team to minimize attrition and maximize retention, he says. All the staff members — from the front-desk employees to the cleaning crew to the top-level managers — need to engage the member at different levels.

“The more we're in contact with a member, the higher the retention level and the higher the referral level,” he says. “Clubs wonder why they should have to pay to keep a member, but that's a cost of doing business. Service speaks for itself and is a message about the brand.”

The current attrition rate, which is calculated by dividing the aggregate dropped memberships for 12 months by the 12-month average beginning memberships is about 30 percent for members of the International Health Racquet and Sportsclub Association (IHRSA), says Brooke Correia, IHRSA spokesperson. While some clubs have struggled with plummeting retention rates, other facilities have discovered the key to satisfying and retaining their members. Rick Caro, president of consulting company Management Vision, identified the following four clubs as fitness facilities with high retention rates. In his mind, retention couldn't be a more important issue going forward for the fitness industry.

“We have more pressure than ever before to maintain the members we have,” he says.

Keys to Retention: Customer service, membership surveys, personal training program, group exercise program, partnership with a local hospital and community outreach

Over and Above the Sale

A membership sale doesn't end when the new member signs a contract at the Baptist East/Milestone Wellness Center in Louisville, KY. The five full-time salespeople are expected to make new members feel welcome.

“When I hire salespeople, I tell them that it's important to meet the quota, but it's even more important to do the follow-up,” says Diane Kelton, president of the club.

The salespeople call new members during the first week, third week, sixth week and second month to address their concerns and answer their questions. During these calls, the salespeople make sure the new members have taken advantage of the two complimentary fitness assessments. The free tests help the club improve retention by helping new members meet their fitness goals, Kelton says.

When members leave the club because they are not happy with the fitness facility, the complaints come directly to Kelton. Over the past year, she has only met with 10 to 15 members who weren't satisfied with the club, she says.

“Because 23 percent of our members are seniors, a lot of the time, they leave for medical reasons and are in tears because they have to resign,” Kelton says.

To maintain the club's high retention rate, employees focus on getting to know the club's 6,900 members.

“Our overall customer service has a huge effect,” she says. “When I'm out socially, the first thing they say about the club is that we have a great staff who is really friendly.”

Members can also make their voices heard by dropping a comment in the suggestion box. An employee types the comments on a spreadsheet, which is distributed it to the managers, and the club's staff responds to the comments within 72 hours.

To get even more of a feel for the members' opinions, the club has mailed an annual membership survey for the last five years. The club typically gets a 20 percent response rate to the survey. To encourage member participation, the club hands out prizes such as ear buds, tote bags or can cozies when members return the survey. This year, each of the staff members had to suggest two changes to their department based on the survey results.

“Surveys are a good measurement tool to know you're still on target and your member satisfaction isn't sliding downwards,” Kelton says. “You get a lot of useful information.”

Keys to Retention: Great Start program, service managers dedicated to retention, member information sheet and Houstonian Cares

Personal Touch

The members of the Houstonian Club and Spa are treated like part of the family. When they return home from the hospital with a new baby, they often find on their doorsteps a onesie that says “Fit Kids Are Our Business.” When they reach other milestones such as completing a marathon or celebrating a golden anniversary, the club sends them a card, and when they're in the hospital, a vase of flowers may appear in their room. The gifts are part of the Houstonian Cares program, which is a key to the club's 97 percent retention rate, says Colleen Kennedy, director of membership and an employee for 25 years.

“Our members are floored by what we do,” she says. “We go to funerals, hospitals and Bar Mitzvahs and try to be there for them when they have accomplished something or need to be cared about.”

The club hired two full-time service managers — one who manages the Houstonian Cares program and another who welcomes new members into the club. Kennedy created the positions after reviewing a study of 12 companies that were successful in their sales efforts. She discovered all the businesses had one thing in common — they had a sales manager and a service manager.

“The problem with most clubs is that you have sales people doing service,” she says. “When you have a sales person do both, you won't be able to hit your sales numbers. When our sales people have a stellar month, they can walk away feeling that the leads that they sold are going to be well taken care of.”

New members pay a one-time initiation fee of $12,000 or $24,000, depending on their needs for child care and other privileges, and then a monthly fee. The club, which has a waiting list for membership, is by invitation only and can handle 250 new memberships a year. When new members join the club, they fill out an information sheet to receive complimentary fitness evaluations and personal training sessions through the Great Start program. The service and sales managers currently track the members' usage of the club and its services using two software programs, but the club is looking for ways to streamline the prospecting and point-of-sale systems.

The members at the Houstonian can also participate in a diverse range of social events from a pool-side Blues Night to a Fall Festival.

“Social events are one of the greatest retention tools because that's when they meet other people and are wowed,” she says. “There is a lot of value, and they don't want to leave the club because of that.”

To gauge members' response to the social events and the club's services and programming, the Houstonian mails an annual survey to every member. Last year, the club received a 21 percent response rate and had 184 pages of verbatim comments, says Mark Stevens, club and spa general manager.

“It went above and beyond the expectations of the survey itself,” he says. “We go through the comments line by line and department by department. It's expensive, but it's worth the cost.”

Retention Rate: 90 percent at the Pacific Athletic Club and 84 percent company-wide

Keys to Retention: Family-oriented programming, cleanliness of the club and focus on customer service

Family Ties

When members walk into the Pacific Athletic Club in Redwood City, CA, they're greeted by a lobby with an atrium ceiling, views of the swimming pool and rows of colorful bulletin boards highlighting the club's programming. By offering two separate child-care areas — one for six-week-old infants through five-year-olds and another for five-year-olds through 13-year-olds — as well as family-oriented activities and programs, the club has been able to maintain a low attrition rate, says James Gerber, operations manager and community outreach director for Pacific Athletic Club, which is one of the Western Athletic Clubs.

“There are tons of offerings for the kids,” he says. “With the friendliness of the staff and comfortable atmosphere, we try to make our club the third place families want to spend their time away from work and home.”

Many of the club's members signed up for a membership when the club first opened its doors in the high-tech area of Redwood City, and they haven't left in 14 years. To improve the club's retention rate even further, the club is hiring a member service representative who will introduce new members to the club, find out about their fitness interests and make them aware of programs and services. Three of the other Western Athletic Clubs employ a customer service rep, Gerber says. While the club's sales team welcomes new members and integrates them into the club, the member service representative will be dedicated full-time to taking care of new members and getting them involved in the club and active in the programs more quickly.

To communicate their programs to members, the department managers update designated bulletin boards with event announcements, and the club mails bi-monthly newsletters to members and sends targeted e-mail blasts. Members also can express their comments on feedback forms, which are available throughout the club. The general manager reads all comments and then assigns them to a department manager who responds and records a comment about their phone conversation in the member's file.

Another key to the club's retention program are social events, many of which are complimentary. About 700-800 members attend anniversary parties. Members also regularly attend other events such as fishing expeditions and children's carnivals.

“The overall goal of our social events is to create the opportunity to meet other members, which ultimately leads to the best retention program,” Gerber says.

The club has an in-house, high-end spa and a physical therapy clinic that offers health screenings to the club's members.

Cleanliness and customer service are also top priorities at the club, he says.

“It's a team effort,” he says. “There's a huge focus on treating new members well and having customer service standards.”

Keys to Retention: Member success team, consistent follow-up with new members, social and community events, one-on-one new member appointments

No Code Blue

Ten years ago, the Maryland Athletic Club referred to its membership retention program as Code Blue. By contacting members who hadn't visited the club for 21 days, the membership and sales team tried to “resuscitate” their commitment to health and fitness and prevent them from falling off of the workout wagon. The customer service program has since evolved into the Member Success Team (MST).

Four MST members carrying walkie-talkies serve as concierges for the club. When a club member has a service-related question, the MST members are responsible for satisfying their needs. They also call all new members after two weeks, six weeks and 12 weeks to track their progress and address concerns.

“The first 90 days of a membership is critical,” says Mary Bell, MST director. “During the two-week call, we try to lead our members to open up to us to make sure they maintain a happy membership. At the six-week call, we ask them if they are trying all of the things they planned on trying, and by 12 weeks, we congratulate them and see if they've been consistent with their plan. A lot of times, we hear great news like they lost 12 pounds, have more energy and have friends at the club.”

During the new member follow-up calls, the team uses various software programs to access the members' number of visits, what they spend money on, how often they visit the club, their areas of interest and their views on their physical condition. The club currently uses different software programs for billing, booking appointments and tracking members, but the club is looking for a one-stop software solution so employees can view all the members' information in one place.

The club owners also plan to invest in a customer relations management program early next year so the MST team can personalize outgoing messages and communicate with more members.

When members want to cancel their memberships, an MST member meets with them to understand why they are leaving and why their membership didn't work for them. Because members have to give a 30-day notice before canceling, MST team members try to change their clients' minds by offering fitness assessments.

Members who are happy with the club can refer a friend to it and receive a $10 credit for every month that the friend remains as a member.

“The more people you know, the more you become part of the club, and the isolation and fear get dissolved,” she says. “Members are seven times more successful if they have an exercise partner.”

To introduce members to each other, the club organizes social events and competitions year-round. The club has a spring and fall member/guest party, a senior expo, women's show, health fair and dodgeball tournament. Maryland Athletic Club also has a program called Destination Fit, an eight-week virtual trip across the country. Members divide into teams of four and get points at each destination, which is marked on a large map on a wall in the club. The $25 entry fee goes toward the Active Survivors Network, a nonprofit organization, as well as to prizes for the teams. Last year, 81 teams participated in the event.

“It's a fun way to build member success through exercise,” she says. “It helps them to push toward an ultimate result or goal and keep them focused not on the agony of exercise but on the joy of the result.”